газпром инвестиции

Sixteen retailers joined or re-entered the Top 250 in FY2017. The two highest entries, Metro AG (No. 26) and Ceconomy (No. 40) are the new specialized trading companies resulting from the demerger of Metro Group in July 2017. Metro AG is focused on the FMCG sector, with its Metro Cash & Carry operation, as well as its Real Hypermarket chain (which was up for sale at the end of 2018). Ceconomy is the largest European consumer electronics retailer based on sales, primarily through its retail chains Media Markt and Saturn.

Chinese retailer Wumart Holdings entered in position No. 187 due to improvements in data availability. Wumart is primarily a supermarket retailer, but also operates

department, home improvement (B&Q China) and consumer electronics stores.

Of the remaining 13 new entrants, three saw jumps in revenue from significant acquisitions, four retailers achieved predominantly organic growth of more than 20 percent year-on-year, while the remaining six were returners to the

Top 250.

UK-based retailers B&M European Value Retail and JD Sports

Fashion entered the Top 250 in positions No. 229 and No. 234 respectively after making major acquisitions:

•• Fast-growing discount retailer B&M European Value acquired Heron Foods, a value convenience store retail business, in

August 2017. The eight months of sales from this acquisition contributed nearly 40 percent of their growth, but the majority came from store network expansion in the UK and Germany.

•• JD Sports Fashion, a leading international multichannel retailer of sports, fashion and outdoor brands, has acquired a number of sports retailers around the world in recent years.

These include Sports Unlimited (Netherlands), Runners World (Malaysia) and Next Athleisure (Australia) in 2016, Go Outdoors (UK) and Hot-T (South Korea) in 2017, and Sport Zone (Spain/ Portugal) and The Finish Line (US) in 2018. These acquisitions, together with new stores, delivered over 37 percent year-on- year growth in FY2017.

New store openings, acquisitions and e-commerce drive Fastest 50

The Fastest 50 retailers grew revenue on average five times faster than that of the Top 250 group as a whole, recording a 17.1 percent composite compound annual growth rate (CAGR) from FY2012-FY2017. This significant growth was the result of new store openings, M&A activity, and growing e-commerce sales. Two thirds of this year’s Fastest 50 (34 companies) also featured in the FY2016 rankings, although there was a

notable change with Vipshop dropping down one place behind

Albertsons, as its very rapid growth decelerated. E-tailers Vipshop Holdings and JD.com both achieved an increase in their FY2017 revenue growth of almost 40 percent while Albertsons’ revenue was 0.4% up on FY2016.

LVMH leads Fastest 50 net profit margin

The Fastest 50 also achieved a higher composite net profit margin than the Top 250, at 2.5 per cent. The most profitable company, luxury group LVMH, contributed more than a quarter of the Fastest 50 total net profit, with a 13.2 per cent net profit margin. SM Investment (13.0 per cent) and fellow luxury group Kering (12.1 per cent) also achieved double digit net profit margins. Of the 42 companies reporting net income, only six made a loss. These included the rapidly-growing online retailers JD.com and Wayfair Inc.

Three of the top four fastest-growing retailers focus exclusively on e-commerce, namely Chinese e-tailers Vipshop Holdings Limited, JD.com, Inc. and Wayfair, Inc.

The number of countries of operation is not a determinant for increased ranking in the Fastest 50 with the top three

companies all having single countries of operation, highlighting that growth can be achieved in local markets. By contrast, both Kering SA (France) and LVMH Moët Hennessy (France) ranked highest for the number of countries of operations, listing 95 and

70 countries respectively.

Half of the Fastest 50 are FMCGs, which contradicts the modest growth rate of that product sector (composite CAGR of 2.4 percent from FY2012-2017). The Fastest 50 top position is held by an FMCG and 11 other FMCG retailers are ranked amongst the top 20 of the Fastest 50.

Amazon is a consistent performer in the Fastest 50, having featured in the Fastest 50 since FY2004, when Deloitte first started tracking the group. FY2017 is no exception with Amazon experiencing retail sales increase of 25.3 percent year-on-year. As mentioned in Global Powers of Retailing 2017, the acquisition of Whole Foods positioned Amazon for continued growth. The increase in unit sales was mainly a result of Amazon’s efforts to reduce prices for customers, shipping offers, increased in-stock inventory availability, and more product variety.24

Migros Ticaret A.Ş. continued to experience rapid revenue growth with a 38.7 percent year-on-year increase. This growth saw Migros increase its ranking in both the Fastest 50 from

No. 37 to No. 25, and from No. 247 to No. 225 in the Top 250.

This growth was a result of opening 193 stores in FY2017 and acquiring a 96.25 percent stake in Kipa, a modern retailing chain with a presence in Turkey’s Aegean region.25

Magazine Luiza S.A as a new entrant to the Fastest 50 and the

Top 250 reinforces the revenue growth experienced in Latin

America in FY2017. This growth was derived from the opening of 60 new stores in FY2017 resulting in 26.1 percent retail revenue growth.

Reliance Industries Limited/Reliance Retail was a new entrant in the Fastest 50 list FY2016 and continued its rapid growth by nearly doubling its retail revenue (in local currency) in FY2017. This was also reflected in its climb of 95 places to No. 94 in the Top 250. Reliance’s retail segment witnessed robust operating performance, driven by major growth across its grocery,

consumer electronics, and fashion and lifestyle businesses. This was supported by a combination of store expansion and same store sales growth across its store concepts.26,27

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Global Powers of Retailing 2019 | Fastest 50

Several retailers in the Fastest 50 list benefited from new store openings and M&A activity

Among the more significant deals:

•• Lenta opened 40 new hypermarkets and 49 new supermarkets, and acquired 22 supermarkets from Holiday, thereby helping Lenta Group achieve an immediate, sizeable presence in Siberia.28

•• New entrant B&M European Value Retail S.A. entered the Fastest 50 and Top 250 through opening 39 new stores in the UK, 11 in Germany, and acquiring Heron Foods resulting in an additional 265 stores predominantly based in the North of England.29

Case study 1

Founded in 2002, Wayfair, Inc. is an e-commerce retailer that sells furniture, home furnishings, décor and other home goods. Its retail revenue increased by 39.7 percent year-on-year to US$4.7 billion in FY2017, driven by strong growth in the domestic market as well as internationally.

The e-tailer has witnessed strong growth in the last few years with a 51.0 percent composite CAGR from FY2012 to

FY2017. However, Wayfair realized a net loss of US$244.6 million in FY2017, which it attributes to its investments aimed at expansion of its international business in Canada, the UK and Germany. It is focused on building its international infrastructure, enhancing country specific knowledge, increasing its international supplier networks, and building strong brand presence in select countries.32,33

Case Study 2

Albertsons’ leading position in the Fastest 50 FY2012-2017

CAGR is due to two very large acquisitions in 2013 and

2015. Albertsons posted more than a five times increase in revenue in 2013, when Albertson’s LLC brought all of the

Albertsons stores back together again by purchasing the assets from SUPERVALU that they had acquired in 2006 from the former Albertson’s, Inc. In 2015, revenue more than doubled again, when Albertsons acquired Safeway,

Inc. Some recent acquisitions include a 45 percent equity interest in each of Mexico Foods Parent LLC and La Fabrica Parent LLC (“El Rancho”), a Texas-based specialty grocer, in November 2017, and the acquisition of MedCart

Specialty Pharmacy in May 2017. The merger of Albertsons Companies and Rite Aid was announced in February

2018, but in August 2018, the companies stated that they mutually agreed to terminate this merger agreement.34,35

•• JD Sports Fashion Plc has continued its M&A activity in Australia, Malaysia and the Netherlands in FY2016 with further acquisitions in FY2017, increasing its presence in the UK, South Korea, Spain, and Portugal, resulting in a 37.2 percent increase in its retail revenue in FY2017. There was further

M&A activity in the US in FY2018.30

•• X5 Retail Group N.V. witnessed a spike in retail revenue of 25.3 percent year-on-year, benefiting from the acquisition of a number of stores from both Sedmov Kontinent and Monetka retail chains. In addition, in December 2017, X5 Retail Group acquired a number of stores from the O’KEY retail chain in St Petersburg and Moscow, however, this acquisition did not contribute any revenue to the retailer in FY2017.31

Case Study 3

China based e-commerce retailers, Vipshop Holdings Limited and JD.com, Inc., are among the top three Fastest 50 retailers in FY2017. Vipshop’s retail revenue increased by 73.8 percent composite CAGR from FY2012-2017 and JD.com’s by 52.4 percent. These two e-tailers were also among the top three Fastest 50 retailers in FY2016, with Vipshop being the fastest-growing retailer that year.

•• JD.com witnessed very rapid growth with close to 40 percent year-on-year retail revenue growth, mainly driven by growth in customers. JD.com’s active customer accounts increased from 226.6 million in FY2016 to 292.5 million in FY2017. This increase was primarily driven by its success in attracting new active customer accounts, as well as by its success in generating repeat purchases from existing customer accounts.36

•• Vipshop which started its operations in 2008, has also recorded significant growth, with the retailer delivering close to 335 million customer orders in 2017. This has increased dramatically from approximately 193.1 million orders in 2015, and 269.8 million in 2016. In December 2017, Vipshop entered into a strategic cooperation framework agreement with a Tencent subsidiary and

JD.com, providing it with entry on the interface of Weixin Wallet, the main page of JD.com’s mobile application, and also the main page of JD.com’s Weixin Discovery shopping entry.37

Companies were included in the Global Powers of Retailing

Top 250 based on their non-auto retail revenue for FY2017 (encompassing companies’ fiscal years ended through June 2018). To be included on the list, a company does not have to derive the majority of its revenue from retailing so long as its retailing activity is large enough to qualify. Private equity and other investment firms are not considered as retail entities in this report – only their individual operating companies.

A number of sources are consulted to develop the Top 250 list.

The principal data sources for financial and other company information are annual reports, SEC filings, and information found in company press releases and fact sheets or on company websites. If company-issued information is not available, other public-domain sources are used, including trade journal estimates, industry analyst reports, and press interviews. Each year a small number of privately-owned retailers cannot be included in the ranking, because there is insufficient data from any source to make a reasonable estimate of their retail revenue. Carrefour S.A. has been excluded from this year’s report at the company’s request.

Group revenue reflects the consolidated net revenue of a retailer’s parent company, whether or not that company itself is primarily a retailer. Similarly, the income/loss and total assets figures

also reflect the consolidated results of the parent organization. However, where retail revenue is less than 50 percent of group revenue, income/loss and total assets are not used. If a privately held company reports gross turnover only, this figure is reported as group revenue and footnoted as “g.” Revenue figures do

not include operations in which a company has only a minority interest.

The retail revenue figures in this report reflect only the retail portion of the company’s consolidated net revenue. As a result, they may reflect adjustments to reported revenue figures to exclude non-retail operations. Retail revenue includes foodservice sales if foodservice is sold as one of the merchandise offerings inside the retail store or if restaurants are located within the company’s stores, but excludes separate foodservice/restaurant operations where it is possible to break them out. Retail revenue also includes sales of services related to the company’s retail activities, such as alterations, repair, maintenance, installation, etc.; fuel sales; and membership fees. However, retailers that derive the majority of their retail revenue from the sale of motor fuel are considered to be primarily gas stations and are excluded from Top

250 consideration. Retail revenue includes B2B sales made from retail stores, such as warehouse clubs, cash-and-carry operations, DIY warehouses, automotive parts stores, etc.

Revenue figures do not include the retail banner sales of franchised, licensed, or independent cooperative member stores; however, they do include royalties and franchising or licensing fees. Group revenue includes wholesale sales to such networked operations as well as to unaffiliated stores. Retail revenue includes wholesale sales to affiliated/member stores but excludes traditional wholesale or other business-to-business revenue (except where such revenue is derived from retail stores), where it is possible to break them out. For vertically integrated companies, the combination of retail sales, controlled wholesale space sales (i.e., sales to franchise stores, leased in-store shops/concessions), and other retail-related revenue (e.g., franchise/license fees, royalties, commissions) are included in the retail revenue figure. For e-commerce companies, retail revenue includes only direct B2C sales where the company is the seller of record. It excludes the sales of third-party sellers as well as third-party seller fees and commissions (“marketplace” activity sales).

In order to provide a common base from which to rank companies by their retail revenue results, revenues for non-US companies are converted to US dollars. Exchange rates, therefore, have an impact on the results. OANDA.com is the source for the exchange rates.

The average daily exchange rate corresponding to each company’s fiscal year is used to convert that company’s results to US dollars. Individual companies’ FY2017 year-over-year growth rate and FY2012-2017 compound annual growth rate (CAGR), however, are calculated in each company’s local currency.

Group financial results are based only on companies with data.

Not all data elements are available for all companies. It should also be noted that the financial information used for each company in a given year is accurate as of the date the financial report was originally issued. Although a company may have restated prioryear results to reflect a change in its operations or as a result of an accounting change, such restatements are not reflected in this data, except in special circumstances.

This study is not an accounting report. It is intended to provide a reflection of market dynamics and the impact on the retailing

industry over a period of time. As a result of these factors, growth rates for individual companies may not correspond to other published results.

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Top 250 retailers in alphabetical order

Global Powers of Retailing 2019 | Study methodology and data sources